Hungary competition watchdog fines Facebook HUF 1.2 bn

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The Economic Competition Office (GVH) has fined Facebook Ireland Ltd. HUF 1.2 billion (cca. EUR 3.63 mn) after finding it in breach of the law for advertising its service as free on its main page and help centre, the GVH announced on Friday. While users did not have to pay a fee, their user activity and data led to profit for Facebook and can thus be considered payment, the ruling explaining the record consumer protection fine said.
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Facebook's zero-cost business model is based on attracting users through content shared on its pages and collecting detailed data on their interests, behaviour and buying habits. It then uses this data to sell targeted advertising to its business customers and places the ads in the news feed to reach consumers, the GVH said..

The competition authority found that the "free to join" and "free and always will be" messages displayed on the main page distract consumers from the compensation they agree to, i. e. the surrendering of their data and the scope and consequences of this action. The messages the GVH found misleading were displayed on the main page from January 2010 until 12 August 2019 and were only removed from the help centre on 23 October this year.

When setting the fine, the GVH considered only a fraction of Facebook's Hungarian advertising revenue and also took into account that the company made a global change to its slogans in question during the investigation.

We can get a lot of valuable online services free of charge. But there’s no such as a free lunch. We still pay for these services – not in cash, perhaps, but with our data,

Margrethe Vestager, Executive Vice President of the European Commission for a Europe fit for the Digital Age, said at the Internets of the World Conference in Copenhagen just yesterday.

"But the expectation that things on the Internet should naturally be free has helped to dull our suspicions. And so we’ve accepted a sort of Faustian bargain – and to save a few kroner today, we’ve accepted an uncertain, unlimited risk for the future," she added.

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